GST rate on AC restaurants may come down to 12% from 18%: Report

Eating out has always been an expensive affair, more so if you want to enjoy a drink or two along with it. By the time you end up calculating the added taxes, service charges and cesses levied on the delicious butter chicken and naan you just had, you end up spending half of your evening and a good part of your hard-earned fortune on what was supposed to be a fine, relaxed evening.

Then came Goods and Service Tax (GST). For better or for worse, the government decided to levy a standard tax on goods and services. Eventually in case of restaurants, it all boiled down to 12 per cent GST for non-AC restaurants and 18 per cent GST for AC restaurants. In case of five-star hotels, the charge was much more - 28 per cent.Currently, if any part of a restaurant has an air conditioner, 18 per cent is charged as the GST, the Central Board of Excise and Customs had clarified in their FAQ.

That also meant that take a ways from AC restaurants were levied with the same 18 per cent. According to a report in Money control, GST rates for AC restaurants are likely to go down from 18 per cent to 12 per cent. However, it remains to be seen if the GST rates for non-AC restaurants are going to dip as well. The reports also mentions that along with this, GST rates for some daily use items are likely to be lowered, as for unbranded cereals, artificial jewellery and handicraft.

There has also been a proposal to raise the threshold for the composition scheme. Under the composition scheme, traders are allowed to pay a fixed rate to avoid GST paperwork. It was Rs 75 lakh, and is now likely to become Rs 1 crore.In the midst of feedback and criticism of the hurried implementation of India's largest tax reform, the GST Council is meeting to make some 'structural changes' in the national tax regime that was implemented to unify all taxes and bring them under one bracket.

The Mint, New Delhi, 16th October 2017

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